Don Boudreaux of George Mason University talks with EconTalk host Russ Roberts about public choice: the application of economics to the political process. Boudreaux argues that political competition is a blunt instrument that works less effectively than economic competition. One reason for this bluntness is the voting process itself--where intensity does not matter, only whether a voter prefers one candidate to the other. A second reason is that political outcomes tend to be one-size-fits-all, which often leads to dissatisfaction. Boudreaux defends the morality of not voting, while Roberts, who does vote from time to time, concedes that one's vote is almost always irrelevant in determining the outcome.

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0:36

Intro. [Recording date: March 2, 2010.] Public choice: application of economics to political science and the political process. Story, Garett Jones podcast, referencing letter to the editor by Don Boudreaux on death of John Murtha (Congressman, Democrat, Pennsylvania). Laudatory Washington Post obituary for Murtha: King of Pork--he did very good job bringing goodies, earmarks back to his constituents. Boudreaux point: If a person went around the country breaking into other people's houses stealing their money, breaking into banks, and then distributed the proceeds to one's buddies in one's hometown, they would be considered a thief, not a hero; but when a representative of the House of Representatives does it, he's considered a good politician, or successful politician. Shame that people aren't embarrassed to be that kind of politician rather than taking pride in it. A couple of footnotes: May have said in the Jones podcast that there may have been good old days; but that's naive. People have always tried to bring home goodies to their constituents. Just think there used to be less scope for it; maybe less prevalent. People have always tried to get army bases in their districts, dams built in their districts, all kinds of things that government can do to make a politician look good. Second point: some people get very upset that Russ was critical of democracy, part of the democratic process; inevitably quid pro quos in politics; to call it theft isn't productive to the enterprise of good government. Disagree; think it's really important to expose government as unproductive when it is unproductive; important to distinguish between democracy and various forms of democracy that happen in practice. Idea that the will of the people should have some influence on political outcomes beats tyranny. Idea of majority rule is a good idea--has some golden specialness to it--is dangerous. What makes the United States so successful historically is the fact that we are a constitutional republic. One of the roles of the Constitution is to stop government from doing things that are closer to theft and less like things that government ought to be doing. Russ: not an anarchist, not a romantic about the past roles of government--government may have been a little more effective in the past because it did less.

4:35

Certainly true that that is the way modern democracy works. But David Hume taught us, by exposing what he called the naturalistic fallacy, that just because something is doesn't mean that it ought to be. True, that's the way it works. Value judgment: An institution in which people are able to take resources from others, bring them back home for their own benefit and the benefit of their buddies--that is as blatant as the institution we have now. Pork-barrel politics--which is what John Murtha was very, very good at--allowed him to do exactly what thieves would do in the example given. The fact that it's common, typical, does not make it right. Makes it incumbent upon us to point out that that's the reality. Frank Charterow [sp.?], great writer, mid-20th century: You go to Washington and you see these beautiful buildings, marble columns, looks very majestic; pretty city, neoclassical architecture. That glorious facade hides a lot of really nefarious behavior. The fact that the people who commit that behavior are elected to office, have titles--that what they do is not legislated as criminal activity--does not mean it is good for society. Only hope for preventing those activities is if people understand what those activities are. One of the ways to reduce those opportunities is shame. Shame is an under-appreciated social force--applies also to Wall Street. Wall Street made a lot of money during the crisis, but they were just playing by the rules. If you had a chance to make a lot of money, why wouldn't you? Answer: if it's wrong and it's destructive and you are portraying your fiduciary responsibility, or worse, manipulating the rules--government controls the rules--it's not good. Would be good if Wall Street had a culture that said some of the things are moral, and we are not going to pursue them--better than making them illegal. Would be great if members of Congress actually meant the oath of office that they swore to uphold the Constitution. Better world. Huge part of morality--not everything that is legal is right; and not everything that is illegal is wrong. Legislative rules not a guide for morality. Don't want to be naive; but voting scoundrels out of office doesn't require shame. Problem: people in the district in which Representative Murtha was in office are benefiting. They are the beneficiaries of his skill. Many--not the majority of them. Some funded his campaigns. Some attempt now by some candidates to stake out territory, saying they are not in favor of pork. Having said all that, pork is not very big. The glass is half full. In the United States, through most of its history, the pork benefits have been small potatoes. Earmarks small. We get upset about them. Resource wastage terms; but the "benefit" of pork for people who want to build a better society is that it magnifies and brings into relief the larger, deeper problems. Most people understand that a multi-million dollar airport paid for with Federal funds in Murtha's rural district that has only about 2 flights a day, an average of 20 passengers, is not a good use of resources. Airport sports Murtha's name. When people see that resource waste exists and it is the result of constrained majoritarian government in the United States, they are led to ask: What else is going on? That airport may be small potatoes, but perhaps the larger programs are not as deserving of reverence. Pork is an unfortunate thing for the folks in power. It helps expose the true nature of what's going on in Washington.

13:11

Straw man that classical liberals have to answer: People say these free market types have some interesting ideas, but they are against government. Co-blog at Cafe Hayek, much on this topic; might think anarchists, but not. Philosophical non-stater. Anarchy means no law. Philosophically, how far can you push the privatization of collective action. We know from historical studies that it can be pushed pretty far. We know money can be supplied privately in a way that 50 years ago--because there was no research--in a way that even Hayek hadn't thought possible--though at the end of his life changed his mind based on that research and advocated the denationalization of money. Would not push the button today and get rid of all government. Social institutions and expectations couldn't withstand such a thing; we would descend into chaos, lawlessness. Question motivating Jim Buchanan, single greatest figure along with Gordon Tullock in public choice, always emphasize: compared to what? It's not the merits of the market compared to some ideally-performing government, or ideally-performing dictator--it's compared to government as it is likely to perform as the alternative to the market. Also wrong to hypothesize a perfectly working market and assume that's what's happening in reality. Popular mind celebrates democracy, and has a far-too-romantic view of democracy--incumbent upon us to show that government in general, and democracy in particular, has certain flaws that people are unaware of. Works of James Buchanan are online at the Library of Economics and Liberty. Still going strong at age 90; does not shy from philosophical thinking; very Smithian. Are you against democracy? No. To the extent that we have government, obviously it should be tied in some way to the choices and desires of the people governed. Regular, fair elections probably the best way; could debate more online balloting. Government should be in broadly defined way democratic, constitutionally restrained, have certain powers that are off limits to it. The way the 1787 Constitution does it--it enumerates and grants the powers to the government, with the stipulation in the 9th and 10th Amendment that the powers not granted to the government remain with the states and with the people. Against the romanticization of the State and of democracy. Kenneth Arrow, no free market radical, one of the first Americans to win the Nobel Prize in economics--his signature work, 1951, is showing that there is no system of collective choice, be it majoritarian voting, be it appointing a dictator, that generates outcomes are not arbitrary, somehow arbitrary, not somehow the produce not of the genuine preferences and choices of the voters, but instead are the result of the particular mechanisms whereby the collective choice process is carried out. Inevitably the mechanisms tend to determine the outcomes. Book in hand, Social Choice and Individual Values, very difficult to read, written in mathematics. Should have been the end of Welfare Economics--study of choices made collectively, in the absence of politics. Economics has done a great disservice to public policy by pointing obsessively to market failure--that is, that a perfect market doesn't exist--leading to the natural implication, widely held, that therefore the government should come in and solve the problem; oblivious to the question of whether there is an incentive for the powers that are to solve that problem are pernicious. Whole idea of efficiency in economics opens the door to justifications that are not borne out in practice--no more reliable than that markets are perfect.

22:95

Challenge earlier statement, nostalgia. Most people don't agree; most people prefer discretion to rules; want to go on a case-by-case basis; don't want to say this is a violation of this Constitutional principle. They want to say: this speech is bad. Recently Supreme Court ruled that corporations can fund, say, a documentary in advance of a political election. In a public poll, a large proportion disagree with that decision. Could debate the constitutionality, but not going to. Idea that we would want to overturn that decision because it goes against the will of the people, or ban certain types of speech because most people don't like it, whereas there is a Constitutional principle that the government should not be in the business of banning speech. Most people have trouble with that, would say they agree with the principle of freedom of speech, but in this case it doesn't apply. Evolution of American political life over the last 200 years--steady deterioration of the role of the U.S. Constitution in constraining political outcomes. Probably because most Americans don't think it's a good idea. The last 200 years have been generally glorious in American life on virtually every dimension. Slavery would be the big exception, but we got rid of it; trend is good. Many things were not great. One could argue that the move away from Constitutional constraints has been very beneficial. Answer to that? Fans of progress; has been a lot of progress. Answer is twofold. First, the Constitution has worked in many respects; not a dead letter. One of the most important parts of that document is the Commerce Clause. The Commerce Clause in effect gives the power to regulate inter-state commerce to Uncle Sam--takes it away from the states. The Framers didn't use the term "free trade zone," but that's exactly what they did--they created a free trade zone spanning a continent. That free trade that we have from Maine to Hawaii, from Florida to Alaska, allows a huge specialization of labor and hence prosperity. Property rights are relatively secure in the United States. How much that has to do with the Constitution, unsure. We have never had in this country a government that is so out of control and tyrannical that people arbitrarily feared for their lives. Some horrors, of course: slavery; internment of Japanese-Americans during WWII. High-trust society. Regular elections. Two houses of Congress; three branches of government. Not a dead letter. But some parts are dead letters: Article I, Section 8--specifies very limited powers granted to Uncle Sam--no way one can plausibly read Article I, Section 8 and conclude that Uncle Sam should be in the business of building airports in Murtha's home district or bridges to nowhere in Alaska. Legerdemain, play with words--clever lawyers and politicians do. Fair reading of the politician, mindset of James Madison and the Framers of the Constitution makes it clear that they did not envision a national government with vast powers, who could only be stopped from acting when you found a prohibition in the Constitution. They envisioned a government that would be stopped from acting always when it got beyond those powers enumerated. But they lived a long time ago. The claim would be that they were wrong. All these expansions of government--social welfare, social spending, Social Security, Medicare, Medicaid, the welfare state--most Americans generally support; the regulatory environment we live in, from the Food and Drug Administration (FDA) to the Environmental Protection Agency, most Americans would argue these are all good things. The fact that people support these things does not make them wise or good. The idea of a Constitution is to create a government that is not tightly tied every moment to majoritarian passions. Example: Medicare. Medicare is going bankrupt. Most Americans support it today--concept called rational ignorance--because they don't really know what the situation is. Medicare recipients are getting their payments. The future generations are being taxed to pay for those, and that bill is coming due. Even young people don't look 10, 20, 30 years into the future with any clarity. If you are 70 or 80 and someone tells you Medicare is going to be bankrupt in 2035 or whatever the year is, you might express horror but you don't really care that much. You want your check, your pharmaceuticals and doctor visits to be paid for. Same thing with Social Security. Much of what government does today gets enacted and stays enacted and even gets approval because the collective nature of what government does means that people don't know the full consequences of the nature of the programs that they support.

31:37

Rational ignorance. First, the term sounds weird. Surely ignorance is always irrational. All it means is that knowledge is a scarce good. It's not free. If it were free, each of us would be geniuses and fully informed of everything in the world. Huge amounts that we don't know. A few years ago went to the library, to the government documents section, and found the annual--2003, 2004--Code of Federal Regulations (CFRs). All the regulations promulgated by the Federal bureaucracy, most of which have the force of law. Measured the amount of library shelf space that the Federal regulation takes up: 26 feet of library shelf space. And that wasn't all of the regulations, since some of the regulations were confidential, top secret, national defense. Eight yards, almost a first down of regulations. Published every year; each annual set contains all of the past regulations that are still in effect. Printed on thin paper, many double-columned. Closed eyes, randomly grabbed a volume off the shelves, wanted to see if I knew what was in it. Turned out to be from the Department of Agriculture. Opened it at random, put finger on random page; regulation set up the Southwest Texas Lettuce Growers' Association. That's correcting a market failure--that's what government does. Government does so much it's impossible to know it all. Idea that when people go to the polls they are knowledgeable is ludicrous. Rational to not be informed: time is scarce. Gaining knowledge takes time. We need leisure from time to time, we have jobs to do, families. Romantic view is of people in togas sitting around in Greece or Rome. At the margin, most people do and should spend their time attending to those things that affect them most directly; you'd be a poor father if you spent your time learning about regulation. In private market, when you go to buy a gallon of milk, the decision is yours; you have an incentive to know for each market transaction to gather as much information that you think is requisite given the size and importance of the financial transaction. No voter will have a discernable effect on the outcome of an election. People want to believe that every vote counts. Journalists. Russ votes--Don doesn't--understands that outcome of one vote is immaterial. Journalists taking class laugh; then anger, something un-American about it. 2000 election; 1960 election--dozens or hundreds of votes determined election but even if you had stayed home that day it wouldn't have affected the question. But what if everybody had stayed home? They don't. Just asking the question: what is rational for you to do as an individual? Spend time reading to your kid or should you vote? Nothing is accomplished by an individual vote--percentage difference between the candidates not measurable by a hundredth of a decimal point. Just a fact. Can debate how it should affect your behavior; but it's a fact. Moral duty to vote? Scientific point remains. Could argue that in a small town, very small numbers, perhaps some election has been determined by one vote or a tie. Follows from that, that at the margin, no voter has strong enough incentives to gather information about the candidates as that voter would have if that voter truly believed him or herself to be the decisive factor. That's what is meant by rational ignorance. Don't have to like the fact that Don doesn't vote to agree with that point. There is a reason why in elections that the signs say very little. Blue background, name written in red with stars; another candidate's sign has a red background, name written in blue with stripes. May indicate whether the person is Democratic, Republican, or Independent. Voting is not at all analogous to choices made in markets. Not in a moral sense but in an analytic sense, it is a much more ir-response-ible act. It's a feedback loop. There is not that individual feedback loop in the voting process. If you have a family of three kids and you buy a sports car, you are going to find out that that was a bad choice. Most car buyers, unlike most voters, spend a lot of time reading a little bit, test-driving a car, not just the name of the car flashed on the screen; though there is brand name.

42:10

Feedback loops in market decisions, rational ignorance is undeniable. More fascinating: You get a phenomenon in politics you only have somewhat in markets. You buy the sports car and you then you brag about how great it's performing as a carpool car. You are oblivious; and you keep buying it. You can buy a cereal you don't like, you make lots of mistakes; but you usually stop buying cereal that makes you nauseous; you buy the flavor of ice cream you like. But in politics, you can keep buying the same flavor over and over again; it doesn't achieve its goals; it impoverishes the people you think it's helping, and you can be a proud supporter of that candidate forever. Even after they are dead. You can be oblivious, no incentive to look deeply into whether that was a wise choice. Part of your identity, your reputation, your self-esteem; very different process. One criticism that those who don't vote get is: you are not a good citizen; you are falling down on the job. But not falling down on the job; spend a lot of time most of it for free, blogging, contributing thoughts. Thoughts may be worthless, but certainly actively engaged. More productive if took the hour and half to cast a vote or thinking deeply and seriously about some issue and writing an op ed or blog piece about it? The latter. Might have some effect; more feedback, chance of being challenged. If you vote like a moron, there's no cost. Expect angry emails. Might be a personal feeling of guilt. You don't even know if you are a moron. If enough people vote moronically, will get moronic candidates. It is true, of course, that if a bad candidate is elected, and that bad candidate puts in place bad policies, those bad policies later will hurt those who voted for the candidate and also those who voted against that candidate. The point is: at the time of voting, that act--and it's the individual act of voting that we're talking about--there is no consequence to anyone of voting A, B, or not voting at all. Therefore, people are quite unconstrained in being able to express whatever fantasies, romantic notions, anger that they feel. Another underappreciated aspect of voting for candidates--understood by public choice scholars but underappreciated by the public--underappreciated because it's called the people's "choice"--we choose. By attaching the term "choose" or "choice" to candidates and the process of electing candidates we transfer to that choice process the same good feelings we have about choosing in a supermarket. Too much difference between those choices for the political process to have that good name. If I see you go into a supermarket, Safeway, and put into your basket a bottle of wine, a turkey, some paper towels, but not diapers, cleaning fluid, or bubble gum, I can be pretty sure that for that shopping trip you wanted the things you bought and not the other things. But each candidate is a bundle, a whole cart. Like walking into a supermarket and seeing two or three pre-filled grocery carts behind plexiglass. You get to look inside; Cart A has wine and turkey but not paper towels but has diapers; Carts B and C have some things you do want and others you don't want. Could only be half a roll when you get home. Suppose you choose Cart A. We can conclude you preferred Cart A to Carts B and C, but we cannot conclude anything about the individual components. Bundling problem. Each candidate has a position on taxes, environment, abortion, etc. If a majority of voters vote for candidate Smith over candidate Jones, no one really knows if the voters chose candidate Smith because of his position on taxes or in spite of his position on taxes. But candidate Smith will believe that every position he took in the campaign was wanted by the voters.

50:43

Worse than that. The cart's really big. You can't see a lot of the things in the cart. You are stuck with some of the stuff in the cart. Making it worse is that there is a lot of stuff in the bottom of the cart you didn't know about. The diaper manufacturers asked the grocery to put it in the cart. Rent-seeking. We might like the idea that there's a best way to teach kids how to read; but if the Federal level decides--a whole lot of people with No Child Left Behind just happened to be really good friends of the Bush administration. It's possible that was the best reading material, but suspect not. What you get home in the cart is not necessarily the stuff resulting from people sitting around asking what is really the best. Minimum wage legislation--the name makes people think everybody is guaranteed a minimum wage. But you are only guaranteed a minimum wage if you work. A lot of mislabeling; a lot of changing after the fact. The first George Bush said famously in campaign "Read my lips: No new taxes." A few years later he raised taxes. Taxes in your cart. Critique: This is a cheap shot at democracy. Any candidate has a wide range of views. Inevitable reality that it's an imperfect process. I get some stuff I like, you get some stuff you like. It's a straw man, like complaining about gravity because it makes cars burn too much fuel. Flaws are inherent in democracy. Two responses. First, too many people are not as aware of these flaws as they should be. Journalists' reactions. Pointing that out: it's good to know what's true. Second: the choice we face is increasing the size and scope of government a little more or decreasing it. Which direction should we head? If overly romantic view, bias. There are alternatives to government. We don't need the government to determine the size of our toilet tanks. Now that's a collective decision. We don't need the government to decide whether or not we can purchase goods imported from foreigners--but we turn it over to the State. Even with a core list, not going to be perfect; but the magnitude and ill-effects of the problems will be confined to a smaller space.

57:44

Another metaphor, heard ten years ago in talk by Don Boudreaux: What if we chose our cars the way we chose our politicians? Variant on the grocery cart example. We're all going to drive the same cars. Why is that a bad idea? We could have candidates. Get rid of the problem that candidates break their problems. Candidate A proposes a minivan; Candidate B proposes a sedan; Candidate C--usually aren't three viable--sports car. You are not allowed to drive the cars as the voters. You can listen to it honk it's horn, look at it from the outside. Can make a pretty good vote. With four kids, might vote for the minivan. Won't be the best minivan, but if my candidate wins, at least I'll get a minivan. With rent-seeking, hard to find out what the features will be. Don't want kids to watch TV in the car, but manufacturers might lobby for it. I might not win. Why such a horrible outcome? Making that decision collectively costs me. Yet we do that with education, with so many aspects of our lives. If we are doing it that way, there are things that are good about it. The central point is: Is this a decision that should be made that way? Government should do for us what we cannot do well for ourselves. Picking out a car isn't one of them; Cash-for-Clunkers isn't one of them. Can make an argument for them. People should understand how government really works rather than some romantic, rose-colored way. The rose-colored way is the dominant way government is viewed. Is that true? Most people have a very low opinion of Congress, of politicians: lying scoundrels. People blame the individual: Let's vote the scoundrels out. Congress selects for a certain type of person, as most occupations do. The problem, chief problem, isn't with the nature of the particular people in office. It's with the incentives voters face in electing them and the incentives the politicians face when in office. Voters focus on personalities. Voting celebrated as mystical collective experience, sacred act in people's lives. Nothing more sacred about voting for a Congressman than buying paper towels at Safeway.

1:05:10

How might we get there from here? Given that many people have this romantic vision? Viewpoint: If something isn't as good as we thought it should be, we ought to spend more money on it. We never do that in the private sector. Nobody says, if we want better cars we should write some donations to Honda and Ford--bad example. Everybody understands that that set of incentives is misaligned. But people say spending more money on public schools is good. Health care: people complaining. We have price controls on health care: the government already controls every aspect and price in health care. How do we get to a different outcome? Given that you don't vote? Work to build through the promulgation of ideas and by example: freedom and liberty. If that culture is built, it will be reflected in the political process. If people want to be led by the nose, they will be. May be that we can't get there from here.

Comments and Sharing

I had to laugh at you guys decrying government spending as waste when you are communicating via computers through internet (both developed by government command)

Can you actually deny the massive productivity that was unleashed with the internet revolution? I bet 40 years ago you would have called spending on computer networking a boondoggle, since there were maybe a few hundred computers in the entire nation.

I think the last few years have pretty clearly demonstrated that most corporations don't think past the next quarter, but i guess hardcore chicago types continue to shove their head in the sand. The government has invested in things which have increased productivity, and improved people's lives. I think its bizarre to ignore that.

You guys brought up the recurring GMU theme of "markets dont work but neither does government" however I been reading this website for a year and a half and I have not actually seen anyone try to empirically show this. There are certainly historical examples of regulated markets which were subsequently deregulated,were the outcomes actually better? I can think of a few examples both ways.

I'm going to argue that Don Boudreaux should vote, or at least say he does. Let's call it the "example effect," a form of externality. Don is smarter than I am, and he's spent a lot of time thinking about issues like whether it matters for him to vote. I respect him so I buy his argument. Of course I'll tell my wife and kids, who are of voting age, and they will be persuaded. Doubtless they will persuade others. Word gets around. So the example of Don and people like him affects the voting behavior of others, and perhaps could have an effect on the outcome of an election. Don, like all of us, influences people around him--friends, family, his blog fans and other readers. Aren't there plenty of examples of passionate, persuasive people influencing the course of history, in some cases by influencing their voting decisions?

RE: "I had to laugh at you guys decrying government spending as waste when you are communicating via computers through internet (both developed by government command)"

I doubt very seriously that their thinking on this is binary. To decry some government spending is not to decry ALL government spending, no?

Regarding the last two paragraphs, I'm a little confused. On the one hand, you claim (and it's an incredible claim!) that "the last few years have pretty clearly demonstrated that most corporations don't think past the next quarter". A claim for which you provide no evidence. Then, in the final paragraph you ask for empirical evidence of their assertion that "markets don't work but neither does government" (I'm not sure that's the argument being made but...). You don't find that a little odd?

They don't seem, to me, at least, to make an argument for no government, but rather that government should smaller in scope.

Perhaps, but it seems like a stretch to me. What margin of votes typically decide elections? I admit I'm not very familiar with the data, but I'm going out a limb and guessing it's somewhere in the thousands (on the low end).

Even if we assume that Don affects your voting decision, and your's affects your wife's and children's etc, etc, would the net domino effect be in the thousands? It seems unlikely to me.

Nick,
The Internet was based on work by DARPA (Defense Advanced Research Projects Agency) to interconnect Department of Defense computers. Defense is one of the (few) enumerated powers that the U.S. Constitution grants to the federal government.

Nick,
Let's stipulate, for the sake of discussion, that you can identify something that was purchased with federal tax dollars and that:
1. is not related to defense
2. is not related to any other (explicitly enumerated) government power
3. both Russ and Doug would agree is a good thing

That still leaves the following practical questions:
- Was the item something that could have been provided only by the government?
- If not, would the market have provided the same item at lower cost and/or better quality?
- If the money had not been confiscated, would consumers have used it to purchase something that is even more valuable (that is, what is the opportunity cost)?

More importantly, there is also a moral question:
- Was it right to take the fruits of people's labor without their consent in order to pay for this item?

Ahh yes, I knew we couldn't have this discussion without mentioning the $64,000 question which sucked the air out of the room when I heard you speak it.

While I don't necessarily agree with all of the following, can we:

a) choose a healthy diet well for ourselves given the fact that the costs of doing so are immediate where the benefits are delayed?

b) regulate product safety? considering the daunting task of understanding governmental regulations, understanding the inner workings of an automobile in which you entrust your life daily is an equally insurmountable task.

c) regulate pollution by ourselves? pretty clearly not, but you may disagree.

OK - so I understand the merits of smaller government, but this discussion failed to convince me of the merits of reducing the number of people who vote to send representatives to government. I assume that when you say "an individual's vote does not make a difference", you are specifically saying that unless an election is decided by one vote, an individual vote does not matter. I definitely agree this is true, and I am surprised that such a concept causes debate and consternation. Perhaps, you should make the point in such cold mathematical terms. But using these mathematics to ridicule people for "romanticizing" over their participation in elections is overkill, maybe even a red herring. Comparing time taken to vote to time taken writing blogs or spending with children is also a distraction. We vote once, maybe twice a year. That is an insignificant time commitment. Yes, we can never take enough time to make all our votes fully informed, but it also does not mean that we take NO time to get as informed as possible about something we specifically care about and vote accordingly. The largest burden of informing the voters is placed where it should be, on the politicians. If a politician is better at "informing" his supporters than another, then let him/her win and his/her policies carry the day.

I do not find it helpful to know that mathematically my individual vote does not matter and that my life is too finite to understand everything that goes on with government (or economics, or physics, or anything else for that matter). And I do not need to understand these things to understand that government should have limits and is filled with people just as mortal and fallible as I am.

I have been hearing ads that tell me i should fill out my census form to ensure that my district get its fair share of the money. Those ads make me want to not fill out the census form. Shouldn't spending be where it is more needed and effective.

Another interesting conversation... one has to wonder however about the relative significance of dis/incentives to obtain information in market vs. political choices in any conceivable world that has benefited as profoundly from specialization / the division of labor as we have in this particular world. If I recall correctly Dr. Boudreaux remarked that a truly well-informed voter would necessarily be a bad parent because of the endless time commitment required to become well informed. He contrasted that to the information requirements and associated rational incentives that the same individual might encounter, e.g., when buying a new car. But in any world/future where cars are as complex as they are here & now, and are produced piece by piece by multiple highly specialized profit-seeking entities just as they are now -- albeit in an environment wherein none of these producers are subject to any regulatory constraint (including esp. any obligation to disclose and/or not actively hide any product deficits) other than the cumulative impact of decentralized market choices (incl. information seeking vs. hiding behavior) -- how could that same hypothetical individual ever achieve a level of confidence in that hypothetical car sufficient to put their hypothetical child in it? Wouldn't the same information burden apply as in the "rational voting" scenario? Or more generally, can one reasonably/consistently assume that complex industries and composite outputs like automobiles would ever emerge in such a pure market environment, and if so, why/how? What makes that scenario more consistent/credible than one in which all-pervasive information asymmetries effectively negate most or all of the benefits from specialization that we've been able to achieve in this particular regulation-encumbered world? I'd be very grateful if one of the discussants could provide or point to a plausible alternative pure market story in which sustained gains from very extensive specialization are an evolutionary outcome rather than an a priori assumption.

Kudos to Don Boudreaux for mentioning slavery, and a puzzled look to Russ Roberts for his glib "we got rid of that." The framers of the U.S. constitution wanted a federal government too weak to interfere with kidnappers and their victims.

Did the Supreme Court decide in Cruickshank that under the Constitution, the Federal Government had no authority to enforce the right to vote? That was in 1876. Is that a limitation of the Federal Government with which you agree?

Would prohibiting slavery be on the list of things government can do better for you than you can do for yourself?

Iconoclasts are often slandered for muddling any given situation with facts. Speaking dispassionately about politically charged issues by focusing on their merits, as laudable as it may be, has never dissuaded a torrent of unexamined straw-man attacks.

Dr. Boudreaux's comment on the specific purpose for the existence of a constitution protecting citizens from "majoritarian passions" reminded me of a prescient excerpt, "Majority decisions tell us what people want at the moment, but not what it would be in their interest to want if they were better informed:" F. A. Hayek, The Constitution of Liberty, Chapter 7, (U. Chicago Press,paperback 1978), p.109.

Thank you for continuing to provoke thought with these insightful discussions.

Great podcast! I've listened to Econtalk for a long time but this is the first one I'm commenting on.

I have one main question on rational ignorance. Russ and Don make the point that the a voter rarely makes the effort to become fully knowledgeable on an issue or candidate before voting because a) people have more valuable things to do with their time, and b) because there's no feedback loop that reveals bad voting behavior.

Couldn't the case be made that these problems would still be present (although presumably in a smaller degree) if these decisions were left private? For example, I doubt most people put alot of effort into researching all the manufacturing methods, health concerns, environmental issues, or moral considerations of most of the products they buy. No one reads consumer reports on every single product or competitor product they put in their shopping cart.

It seems to me there is still a hefty sum of rational ignorance in decisions that are made privately. How does moving decisions from the public sector to the private one decrease this problem at all?

The voting discussion seems silly to me whats the alternative? And after the Bush and Obama elections where different groups (of induviduals) made huge impact.

The discussion on public choice is very ivory towery. Which country has the best education system? Is it Finland or USA? The best health care?
I'm not a socialist at least not here i Sweden by our standards and was a lot more right wing radical when I was younger but some results speak for themself and the effectiv free market solution at least in these areas has not been found.

"Medicare is going bankrupt. Most Americans support it today--concept called rational ignorance--because they don't really know what the situation is....... because the collective nature of what government does means that people don't know the full consequences of the nature of the programs that they support."
Don Boudreuax

Don just once you might consider that you might be the one who is wrong. Maybe most people DO know the situation and they see it as a choice between life and death, pain and suffering, homelessness and a secure retirement. Calling people ignorant who support life, who support treating the ill and infirm, who support not having the elder freeze to death or live off cat food during their finale years is itself ignorance in my opinion. This kind of thinking is the scary result of taking public choice concept too far. You neglect history and you neglect what your reality might look like given a chance in the real world. Maybe those of us who look to the other 35+ developed countries who overwhelming support their public health care systems and just shake their heads in disbelief over argument made like yours above are NOT the ones who are ignorant or irrational. Maybe we actually are the rationally informed pragmatic realist who have a pretty good grip of how the world works today and how it worked in the past.

I don't know why people get so worked up when you point out that their one vote won't have an impact on the outcome of an election. They say to you "if everyone thought that way then no one would vote!" to which someone (I wish I could remember who) once replied "if no one else was voting, then I would!"

It seems like basic arithmetic that one vote is such a tiny fraction of the whole--even in the most local of elections--that it cannot have any major impact. But it's a bitter pill that most people just refuse to swallow.

You write: "Calling people ignorant who support life, who support treating the ill and infirm, who support not having the elder freeze to death or live off cat food during their finale years is itself ignorance in my opinion. This kind of thinking is the scary result of taking public choice concept too far. You neglect history and you neglect what your reality might look like given a chance in the real world."

You imply that Don and I are against treating the ill and the infirm. Or in favor of letting the elderly freeze to death. This shows a lack of empathy and imagination. Classical liberals do not believe in forcing people to help others. That doesn't mean they won't get help. It's like saying that in the absence of farm price supports, there would be starvation in the United States.

Of course we might not like a world of smaller government. We might be wrong about how that world would work. But please don't suggest that because we want private voluntary solutions to social problems implies that we are callous or heartless. We want the same thing you do. We just think there's a more effective way of getting there.

Excellent questions. You're right that there are incentives for rational ignorance in private markets. In both private and public markets, people turn to experts for advice to economize on the costs of acquiring information. Most of us don't spend hours looking at the engine (or the brakes) of the Toyota we buy. We trust the brand name and we also trust the choices of others. We presume, usually correctly, that if Toyota is a popular car, it's probably pretty good.

Sometimes, we make mistakes, ex ante and ex post. In the case of the Toyota braking problems, Toyota is going to spend a lot of money trying to convince me their cars are safe. Republicans spend a lot of money trying to convince me they are good for the country.

I would suggest that the processes by which we evaluate the truth of those claims--both self-interested of course) are very different. I would also suggest that the feedback loops that encourage truth-telling are very different.

The Republicans are nominally conservative. Between 2000 and 2008, they acted like Wilsonian Democrats in foreign affairs and Johnsonian (LBJ) Democrats in public policy. If they were a product in the marketplace, they would have gone bankrupt and be out of business. Instead they are thriving.

Audi had similar problems to Toyota's. Audi's problems turned out to be greatly overblown and maybe irrelevant. Still, Audi was damaged by the fear that their product was unsafe. They almost didn't make it. This was a mistake in the opposite direction--a product that was OK that people were misinformed about. It happens. But because the problem was not real, Audi was able to re-establish their brand name.

So while your point is correct--that information is costly to acquire in both the political and economic marketplace, I think the incentives and feedback loops are very different.

Thanks for responding! I'm not sure I completely buy your explanation though. Let's say you're a person concerned about the environment. You feel the environmental costs of you're actions should factor into every product you buy and every politician you vote for. But just as politicians can make promises and then break them, private companies can disguise their environmentally unfriendly products behind misleading advertisements and branding.

In both cases the truth behind their actions is publicly available, but the time costs of finding those truths can be more than you're willing to spend. Also in both cases there's no functioning feedback loop that will expose the mistakes of your actions except for a vague future result that is virtually untraceable back to you're action.

So again how exactly are the incentives and feedback loops in these situations different? I'm a recently graduated high school student taking a gap year, so I apologize in advance for any lack of economic knowledge that might be important in this situation.

Probably not. Especially if there are alternatives. That threat helps keep companies honest. It's not perfect. And you're right, a company that purports to be helping the environment might be lying or it might simply be wrong--it's product isn't as good for the environment as it thinks. Such claims are difficult to monitor and verify. But products that are dangerous or companies that are dishonest struggle to stay in business.

Politicians who lie and pursue bad policies also get thrown out of office. The question is which force is stronger--the market or the government. They're both imperfect.

I often vote but often not. On the day of an election I kind of feel like I'm missing out due to all the news coverage if I don't... Anyway I digress, the problem with the democratic system is at no point does anyone stand up and say "hang on, don't we have enough laws? rather than making more new laws why don't we go through and repeal some of the old ones which clearly don't work anymore, or, why don't we as congress/parliament etc. just pack up and go home as really enough is enough we can't legislate ad infinitum!"

The fact that no Congressman or MP ever even considers saying something along those lines is what concerns me. If a party has been in power for 10 years then why do they need to keep on legislating? If they haven't achieved their goals in these years it's blamed on the previous party's bad legislation and then the next party comes in and spends time passing laws because the previous made such a bad job. Although in western democracies people argue that the difference between the main parties isn't so great anymore, still there are differences and the principles of legislating to "correct" the errors of the previous regime is obvious. Parties have an agenda, a vision, which basically entails them passing lots of tedious laws which just keep pen pushers and the governments circles spinning with no intellectual, practical or philosophical reasoning - it's almost masochistic.

In regards to the baskets discussed in the podcast I agree wholeheartedly - the Republications who voted for Bush and got big and constantly growing Government were not represented as they would expect. Likewise anyone who voted for Obama's promises of "change", isn't getting anything back as it was meaningless rhetoric - like a basket full of nice looking fruit but once cut and peeled it's all rotten. Thanks.

Politics seems to work like Keynesianism: the importance lies in the aggregates, and those aggregates can be stimulated with government spending. Maybe that's why politicians refuse to accept free market approaches.

On slavery, remember it's in the Constitution because that was the only way to achieve an agreement, not because all the Founders accepted it as appropriate. That agreement, 3/5 representation, was actually a step forward - it included slaves in the American system (not appropriately, but it acknowledged their existence and numerical importance). It was an acknowledgement that they were not just chattel.

Also remember that slavery and subsequent Jim Crow segregation were the LAW. Government confirmed that behavior and protected and enforced its continuation. These are examples of bad laws. Emancipation was ending bad legislation and ending government enforcement of bad behavior.

I have been listening to Econtalk for awhile and yet I am motivated to comment on this podcast. I was disappointed that a clear concise definition of public choice economics was not given at the outset. it is in the title and not such a pedestrian school of thought that everyone is going to have a common definition. I had looked up Pub. choice in Wikipedia a while back and didn't come away with a clear idea of how and where it fits in to overall economic thought. What it is a reaction to, etc.

I also was disappointed that a good definition of rent-seeking was not offered. This I believe I understand. It is the desire of economic actors to put any kind of barrier, regulation or structure into place that prevents incremental returns from being driven down to the industry or actor's marginal cost of capital in a competitive marketplace. And hence that actor enjoys collecting economic rents.

Had we a good definition of those things and pursued some overlooked avenues in the conversation, we might have discovered that the alleged immorality/stupidity of John Murtha and his constituents is nothing more than rent-seeking. They are rational economic actors! Nice new airports are economic development in several ways and afford present and future economic rents for a range of local actors.

I was puzzled to find that this strange piece of the CFR on the SW texas lettuce growers association was not investigated further. Did the "government" just wake up one day and create this without forethought and provocation? I think not. It is the creation of other rent-seeking actors.

So then is the goal of libertarian or free market economics to inhibit rent-seeking actors (of all kinds) from collectively controlling the government? If so, how? What rules/structures/institutions might be necessary now, with 21st century technology that weren't necessary in 1787?

I suspect this discussion took place in the Agora, in Cicero's garden, in Montesquieu's library, on horseback with Jefferson, etc., etc.

But, just positing that is acknowledging that we never quite get it right with any permanence. Eventually it seems that any system, based on monopoly justice and defense, devolves opposed to a general will, whatever Rosseau meant. The system governs for its own survival, temporarily ignoring any long run consequences.

One gets the idea that Roosevelt's boast about Social Security is being replayed in Obama's push for more and even more government involvement in our health system. It becomes public choice with an addictive bent. We know it's bad public policy, but who's going to rescind it? For a while it's going to feel pretty good.

As to a solution, education isn't it. Bankruptcy is more likely, that point in time when no one else will lend to us (defined as future generations) in support of our almost narcotic "welfare"/transfer system. If education were a possible solution, we would have already discovered what happened to Athens, The Roman Republic, The "Reformed" to Death British Constitutional Republic, and even Bismarck's Prussian Contrivance with just a hint of buying-off revolution.

Public Choice? "Citizen" chooses the freebie, perhaps, if required, puts it on his card; moreover, if he has to pay the card balance, will urge that his real choice is to tax the guy "behind the tree".

As to the romance of "democracy" and suffrage, there seems to be a link between expanded franchise and one's chances of retreating from Moscow in Napoleon's "invincible" army, surviving at the Somme in a trench, recconoitering at the bend in the Bulge, being a 2nd Lieutenant leading a patrol in 'Nam and luxuriating as a lower deck oarsman on an Athenian Trireme. History says: no romance.

Natural law was the basis of our constitution (rights to life, liberty, and property) ... It was set up to enumerate powers to the federal government to protect our natural rights from interference by a) government and b) other people.

The problem with our constitution was that it was a creation of government (or at least a government soon to be). And in order for the government to thrive, it had to classify an entire group of people as non-persons in order to achieve ratification by the southern states. Note that the constitution does not specifically allow for slavery; however, it conveniently dodges the issue. In a libertarian society of law and order where natural rights are respected, one man can never own another because free will cannot be sold. It is the perpetual nature of slave labor that makes a person unsaleable.

It is only BECAUSE of government that slavery was possible. Government enforced the notion of people as property. The federal government had the ability from its onset to protect our natural rights but CHOSE NOT TO USE ITS POWER in order to ensure its own survival. In addition, the federal government went above and beyond via legislation like the Fugitive Slave Act to socialize the costs of slavery while allowing plantation owners to privatize the profits.

This was perhaps the first but not the last time that the federal government judged a class of people as non-persons. Again during WWII in the Korematsu decision, the supreme court ruled that rights to life, liberty, and property did not apply to Japanese Americans.

I do have a bone to pick with Prof. Roberts for his assertion that "we fixed that". The civil war was hardly a quick and easy fix. The abolition of slavery was accomplished through peace in all corners of the world. We're the only country that had to kill hundreds of thousands of people to achieve abolition.

It is the myth of benevolent government that allows it to continue in its current form. I suggest Dred Scott's Revenge by Andrew Napolitano for a layman's explanation of the history of government induced racism.

Russ said - you could make an argument for (government regulations of toilet tank size) but that he didn't think it would be a good argument.

But I cannot think the "free market" would do any better. I live in Palo Alto, a semi-arid area across the street from the Hover Institution.

Currently Government has to try to regulate water use because Government supplies our water. They subsidize the price and are unable or unwilling to use the market principle of raising the price for water to curb use. This would be the most effective way to curb water use - remember what happened when gasoline became very expensive two year ago; people drove less and bought more efficient cars. But we cannot have a world where only the rich can afford to bathe.

But suppose our water company was private they would still face the same public outrage should the price of water double. True enough they would not have to run for re-election and might be able to force this but at what cost to themselves. Soon their prices would be regulated - by very popular positions who ran against "Big Water" and won.

Would competition help? How many water pipes come to your house? Would profit motive help? Perhaps a highly motivated private company could suck dry every river to supply water but what happens to the Salmon fishermen? What recourse would they have when their industry collapses because there are no more fish?

So the private company becomes just as regulated as any public agency and because they cannot get more water and they cannot raise rates beyond some government threshold they will turn to your toilet tank. They may not be able to regulate it since they are not a law making body but they will offer incentives for you to replace it just as PG & E (Peoples Gas and Electric) offers incentives for you to buy a new mere efficient Refrigerator.

In Palo Alto we have a municipally owned utility, not PG & E and I really don't see much difference except my rates are lower and I believe I have more influence over my local utility then I ever could have over PG & E as a customer.

It was an interesting discussion on the voting or not, but held too much from the perspective of the voters and not enough from the perspective of those being voted on... which is where it most could count.

By the way I vote, at least when I think my vote is being counted correctly, there are those of us out there in the world that find ourselves so much lower on the democracy ladder.

Also, perhaps you said it, but I did not hear it. If pork-masters did not exist they would be created by the politicians because, in a world of relativities, the best way to stand out as a hero is to place yourself next to a bandit and frown with contempt.

I believe it was in last year’s podcast with Peter Henry on growth in developing countries that I learned that countries that had inherited French legal institutions were at a significant disadvantage economically when compared to those who had the blessing of Anglo-American common law.

On first blush, one has to wonder if this might explain any of the peculiarities specific to the great state of Louisiana.

With a name like Boudreaux, I assume that the good Prof. Boudreaux is a great example of an exception that proves the rule?

Thanks the podcasts! Makes me rethink my beliefs. I am generally for smaller government and consider myself a quasi libertarian.

What I don't understand with a free market is who provides the rules? When my son was 6 years old, he liked to play games with his rules. His thinking was that he could win more often. With everyone coming into the discussion with their own set of desired rules (we are the special interests), how are rules decided so there is a level playing field. I am not sure that most actors really want a level playing field, but to have choice I think it is important. Otherwise there are few corporations creating all the widgets, giving the consumer little choice to control the outcome.

In small settings, you could setup conditions for a level playing field. For example, a cake needs to be cut fairly for 4 people. One person can cut the cake and the others choose first. The cake cutter chooses last, making it in his best interest to make the pieces equal. In a big market economy, setting up fair rules is much, much harder.

Granted, the government does not do this well at all either, for example the sugar industry.

I feel that this issue is never really discussed, just that the market and the consumers would make it happen magically. Just invoke the invisible hand of Smith.

So here is what I heard you say: “Whether one votes doesn’t make a difference because one’s individual vote cannot affect the outcome.”

Restated: “People erroneously believe that their individual vote can affect the outcome.”

Obviously I am paraphrasing above, but just trying to tell you what I head in substance.

What you didn’t quite say explicitly, but appeared to imply, is that voting is therefore irrational, and furthermore, that people who believe that their individual votes matter are either ignorant or stupid.

I must say that I find these statements themselves, if I have understood them, to be mind-numbingly stupid.

Since you and your guest are not stupid, and I will posit for the sake of self-respect that I am not stupid, we must be seeing the subject from vastly different perspectives.

Now, let me share my different perspective:

It is quite possible (I would argue normal) that people act as individuals with consciousness that while their individual actions don’t matter, together, their collective action matters. In this view, what I choose to do as an individual makes a difference when it is multiplied, as I rationally expect it will be, by everyone acting with me. It feels quite bizarre to make this point to an economist, since I think it’s a fundamental economic insight restated in a political process: the tragedy of the commons.

And why shouldn’t the tragedy of the commons apply to a political choice the way exactly the way it applies to something like littering or going through red lights? If everyone doesn't vote because no one's individual vote matters, the system will all apart. People understand this. Do you really believe that people are unaware that their individual actions mount together in just this way? I doubt it. People have the visceral experience in life of what happens when individuals act without consciousness that a flood is a bazzillion drops of water.

So please help me understand how I am misunderstanding what you are saying.

One other point, so many of your objections to political decision making (in terms of baskets that mask what is selected) apply with equal force to market based decisions. Market decisions are made every day in the absence of discrete information through signalling and "the wisdom of crowds" -- again, these are economic ideas -- why would we suddenly forget them because we are talking about voting?

It has been awhile since I was taught about Progressiveism and at that time it included Bob Lafollette, recall, initiative, and referendum. Surely this topic intersects current affairs, economics, and what constitutes a science.

Two excellent articles whose authors eloquently argue that in most elections, and for most people, there is a moral obligation to not vote (given rational ignorance, and the opportunity costs associated with becoming a good voter):

At the start of this thought-provoking podcast, you discuss how pork spending is akin to legalized theft.

In feudal Europe, the official and legitimate representatives of the government LITERALLY stole the very bread out of their constituents' homes. The percentage of production lost to this theft was horrific to consider.

Any Government run by humans will almost certainly involve theft as well as legitimate transfers of resources for the common good. It is a triumph of human achievement that Liberal Democracies steal so much less than what came before us.

Let us hope that a thousand years from now our descendants will have a system of governance so efficient that they argue over theft of .02% of the national budget (and may that .02% be larger, in absolute terms, than 2% of our current budget).

Although I usually end up actively disagreeing with the majority of interpretations that the vast majority of EconTalk speakers embrace (esp. on those matters where I've had direct personal experience and/or lengthy engagement with the primary matter under discussion), I continue to enjoy the program immensely. Although the subject matter would probably draw me anyway, much of the EconTalk's appeal comes from Dr. Robert's willingness to represent skeptical counterarguments fairly, i.e, to play the devil's advocate as a straight man, rather than the (sadly, far more common) sort of absurd straw man parody that equates disagreement with venality or stupidity.

I'm still not convinced -- e.g., on the superior truth-promoting efficacy of private vs. public production feedback loops, or the likelihood that competition alone would be sufficient to keep everyone "honest enough" (or necessarily exist at all) given the complexity, opacity, and increasing returns to scale that characterize many of the most important markets today -- but I try to keep an open mind, and look forward to the continuing stream of challenges that future episodes of EconTalk will not doubt bring...

@Tom: I think that one thing to remember is that the complexity and opacity in the "most important markets today" (I assume you mean banking, particularly?) is that these things are regulated extensively and non-competitively by government. Absent government controls, it seems extremely likely to me that other, competing methods toward transparency would emerge--I admit my bias here, but it does seem likely.

People demand assurance, and when there is a demand, there will be a supply to meet it. It's hard (impossible) to imagine what those assurances would be, though we do have other examples (UL, Consumer Reports, Good Housekeeping, AAA, etc.) existing in the private market where they are allowed to exist, so private assurance is not unprecedented.

@Shawn, I understand the logic of your counterargument, I just find it to be repeatedly falsified by firsthand experience. In industries characterized by high startup costs and increasing returns to scale, competition itself is often weak and/or fleeting, and as a result so too are many/most of the market virtues that competition is generally thought to sustain. In industries that are characterized by high levels of complexity/opacity, consumers and their advocates (and in some cases, almost everyone else) don't even know what they should be interested in -- and where opacity coexists with high levels of market power, consumers don't possess any means to effectively press their interests in greater transparency anyway... except perhaps by advocating regulation.

I agree that private/self help-based assurance mechanisms like the ones you cite can make a difference on the margin, but it seems to me that those examples are/were made possible by the imposition of transparency and disclosure requirements by exogenous forces (i.e., government regulation). I think the derivative origins of these institutions is demonstrated by the *absence* of institutions like AAA and Consumer Reports for industries where opacity and nondisclsure are the norm. Banking is just one obvious example.

I am disappointed that Dr. Boudreaux finds that everything - everything! - that Dr. Boudreaux does provides more value than voting. While I agree that writing an OpEd piece or blog entry may directly influence more people than his individual vote, there are things that he does that, if he would honestly assess their value, truly provide less value than voting.

Saying that we need to build a culture of freedom of liberty and freedom through the promulgation of ideas and through example is one thing, but I am disappointed, again, that Dr. Boudreaux will say this and not realize the value of the example of voting.

I also find it interesting that Dr. Roberts votes more in national elections than in local elections. I would think that an economist would grasp rather quickly the best way to maximize the value of his vote. By regularly voting in local elections - school boards, district managers, etc - the voter increases that marginal effect of his vote, since those elections concern, by nature, a smaller electorate.

To Frank Flynn: The way I understand your argument, is that we cannot just increase the price of water to limit consumption, as it would mean that poor people could buy little to no water. Thus we have to regulate instead of increasing the prices.

What if you take all the money collected from higher water prices and distributed equally among all people?

If you use an average amount of water, the extra you have to pay for the water (compared to now) will equal the water-cheque you get from the government each month. So it would be possible for everybody to maintain an average water consumption, given that the state has send them a cheque roughly equal to the cost of an average consumption. Now, poor people may well choose to use less than the average and rich people will choose to use more than the average. But nobody is forced to do either.

I am wondering if Demarchy or lottocracy (see http://en.wikipedia.org/wiki/Demarchy ) would solve the problems Don Boudreaux and Russ Roberts mentions with Democracy.

People seem to agree a lot more about ends than means. So maybe the electorate should rate different goals instead of voting for politicians. The "politicians" randomly chosen in a lottocracy would then have the pay adjusted accordingly to how well the goals were fulfilled.

Russ, I would appreciate elaboration on the remark you made at the tail end of this program, summarized in the show notes as "We have price controls on health care: the government already controls every aspect and price in health care."

I am aware of many interventions in this market, such as medical licensing, FDA proscriptions on acceptable therapy, and the tax advantaged status of employer-provided medical insurance, which contribute to higher prices and less variety in approaches to health care services, but I can not think of any explicit price controls per se.

I would appreciate further references if your remark was meant to encompass legal provisions beyond the indirect sort like those above.

Sincerely, JRP

PS: what about a health care show with Atul Gawande? He gets so much press these days, I'd like to hear the conversation surrounding health care economics.

"much of the EconTalk's appeal comes from Dr. Robert's willingness to represent skeptical counterarguments fairly, i.e, to play the devil's advocate as a straight man, rather than the (sadly, far more common) sort of absurd straw man parody that equates disagreement with venality or stupidity."

Great comment, although I probably agree with Prof. Roberts more than you seem to. He needs to sometimes remind himself to call on his true inner Devil's Advocate, since he has talent for it.

On the matter of representing conflicting views honestly, my other favorite example dates all the way back to 1979, in a brief book review of Galbraith's Wealth and Poverty published in Forbes and written by none other than George Gilder -- who seems to be a reflexive Austrian on most matters (i.e., excluding the bandwidth market).*

In the review, Gilder concedes that Galbraith is basically right on the facts, e.g., that

-- "big businessmen believe in socialism for the rich, and free enterprise for the poor,"

-- "For all their ideological commitment to free enterprise, businesses are primarily devoted to successful enterprise, pursued in any way they can and are delighted to benefit from government action against the competition," and

-- "...the very ideal of business ideology is itself flawed. The notion of perfect competition is a figment of economics that survives because of its rich mathematical yield in computer models, but is little related to the turbulent markets of the real world."

However, Gilder seems not recognize that market power is fungible, and can be deployed in a wide variety of anti-competitive strategies that have nothing at all to do with government action. Thus Gilder concludes with the subtly sterilized claim that "The truth, perceived by Galbraith perhaps better than by most of his adversaries, is that the very essence of capitalism is the competitive pursuit of transitory positions of monopoly."

Of course, the duration of some "transitory" positions of monopoly can be measured in large shares, if not multiples, of human lifetimes -- and in a world in which more and more industries benefit from increasing returns to scale, there's no reason to think that this is going to change, except perhaps for the worse. Occasional antitrust-inspired government intervention in the economy may not be absolutely consistent over time, may add marginally to investor uncertainty, may be strongly shaped by ad hoc political processes, but even so it's not clear to me that the cost of those obvious defects is in the same ballpark as the alternative cost of having to suffer under the burden of unchecked monopoly(s) for most or all of one's lifetime (the subjective term for which is "forever").

*On the single issue of bandwidth, Gilder seemed to think that a big change in absolute supply of one specific commodity (i.e., the exponential growth in networking capacity made possible by optical multiplexing technologies) would inevitably revolutionize every aspect of the economy. However, the past decade-plus of experience has clearly demonstrated that in the absence of real competition, such technology-driven productivity gains don't really matter much at all, except to the monopoly bandwidth supplier. Arguably, the continuing *non-revolutionary* impact of this technology in many places and sectors provides an idea of one of the costs of relying on organic competitive pressures to emerge and sort things out.

George Gilder, "Galbraithian Truth and Fallacy," in Forbes (November 12, 1979). It doesn't appear to be available online (except through Lexis Nexis), but if there's interest I'll try to post it online somewhere... or perhaps Dr. Roberts would like a copy for the Library of Economics and Liberty?

Wow, lots of comments. I think it would be interesting to get Walter Block on the show at some point, I'm sure he would stir the pot even more!

emerich, who do you purpose non-voters say they vote for? If I vote for the winner I am said to have endorsed his policies, if I vote for the looser I engaged in the political game, and so approve of the outcome, and if I refuse to vote, my silence is taken as consent of any policy to follow. If I object to the premise that you and your friends can get together and vote away my liberty and property, who do I vote for? By definition every candidate holds that premise.

I agree with you guys in principle, but I think you are coming across as too pessimistic. Whatever the faults of our current governmental system, you cannot argue with the fact that both the voters and the politicians are better educated and better informed than ever before in history. I have to believe that in the end this will result in positive change. I think that change is just much slower than we wish.

You guys talk about your blogging and educating the public, guess what, that has only been around for 5 maybe 10 years! Give it some time! I guarantee the body politic will be much more economically sophisticated in 50 years.

I think there IS feedback in the political system, it is just painfully slow, on the order of decades.

The excessive spending and expansion of government post WWII is both a handicap on our growth and CAUSED BY our growth. It is our excessive riches that make the billions going to medicare, etc. unnoticeable. You can't expect a filthy rich man to pinch pennies.

On Pork. One thing you did not mention is the fact that every district expects to get its share of pork. It isn't like all the money is taken from one group and given to another. EVERYONE likes being able to call the feds when they need a ridiculous amount of money for a ridiculous project. I'm not sure this is a bad thing, I think it is kind of fun and experimental. Sure most projects will be wastes of money, but some might be brilliant.

You could point out that the rich states like New York and California do in fact get billions taken out of their pocket and given to all the poor sparsely populated states, but this seems to be a kind of quid-pro-quo worked out over the years. I don't think these rich states really want to go it alone, they like being part of a big trading space even if that means losing some money in "donations". If you really thought California would be better off by itself, you could just as easily argue that LA should secede from California. There must be benefits to being part of a large geographic entity or else the world would have a lot more city-states.

Nice podcast. I liked your shopping cart metaphor for elections. To Don's point that government is not responsive, I would comment that: 1) I blame the two party system for some of the harms here and 2) I believe the two party system is inevitable given the first-past-the-post voting scheme that is widespread in the US. I favor electoral reform that would make third parties viable; particularly single transferable vote and to a lesser extent instant runoff voting.

I agree wholeheartedly with the discussion about the impact of an individual vote. As one who has voted Libertarian most of my adult life, I've had to constantly endure the "but you are wasting your vote" response. I kind of made up my own version of Don & Russ's comments.

I would like to comment on the discussion of how often an election is decided by one vote. Certainly not often but not zero. A town near me recently had a tie for a seat on the School Planning Board or something. I think the vote was 232 to 232 or something similar. The election decided by a coin toss the next day. What was of interest to me was that everyone seemed OK with that. No voters complained. Neither candidate complained. There were no nasty editorials or letters in the local paper. It made me suspect that many folks considered a coin toss to be not must different than the act of voting!

If Dr. Boudreaux effectively spends his time not voting to convince us not to vote, then there will be less votes cast. If the argument is totally convincing, then no one would vote. From the podcast, I got the impression that no one voting would be a bad thing. So, I am confused by the example that he is setting. Who should follow his lead and who should not? Isn't good judgement universal in nature?

Boudreaux's argument was not about convincing others not to vote, it was that there are better things you can do with your time. You vote will have no effect on the outcome, so rationally you are wasting your time.

Your point "If the argument is totally convincing, then no one would vote" is incorrect. Rationally, you know that other people are not rational. You know millions will vote out of habit, emotion, etc. If even a few thousand people vote, you might as well not bother.

I believe his real argument is not about whether you should vote; the argument is that because your vote does not make a difference, you have no incentive to make an informed choice.

@Adam & Russ: I don't think it is the case that people don't understand the fact that their vote in all likelihood won't have any practical impact on outcome, in fact I believe the far majority of people do understand this.

People become angry because of the "but if everybody thought the same way...". These are two distinct ways of considering the question: The first is a logical argument and the second has more of a moral aspect to it. It's a fact that quite a lot of people vote, including Ross (or at least that he claims! :) ) . I don't think it's because they don't understand that their vote couldn't swing the result. It must be something else. Either it is the trust that other people will do the "right thing" and vote (even if irrational on an individual level), it is not impossible that evolution gave us some sort of social behavour like that. It could also be (and perhaps related to the previous argument) that people gain something else from voting such as to be seen voting by their friends (which might imply increased social status). Finally there might be wholly egoistic arguments for voting - like the excitement of taking part of a big event,seeing the result and the potential of a "I voted for the winner!" and stuff like that.

I believe mostly in the social behaviour theory.

@Russ: Regarding your point that it takes government to have the economies of scale to commit genocide etc. how do you know that? Couldn't a big, succesful enterprise not end up being so powerful and commandeer so many resources that it could do something similar? Some companies are bigger than many countries so it is not an unrealistic proposition, especially in a very free economy where there's very little government regulation that could hamper such growth (I'm not advocating such regulation, by the way).

@James: I don't think it's correct to conclude, from the story you gave, that people don't consider coin tosses much different from voting.

In this case, I think people before the election ("ex-ante") would object strongly to the coin-toss method. But now that they have this new information that the outcome was a perfect tie, they realize that both candidates are equally entitled to win from a voting perspective, making an arbitrary choice more acceptable.

I have a lot of thoughts about this podcast. I must admit that on first listen it was very painful. Not, mind you, because I shy away from controversial ideas, or am afraid to confront fundamental elements of my conceptual framework worried that it will come crumbling down. Or because I disagree that there are serious questions and arguments regarding the efficacy of democracy. Or that there aren't great arguments for the abolition of the sate all together, but because of the completely loose and ill formed logic and dialogue that seemed to come about. The extreme over-simplification, demonstrably false, straw-man laden, and incredibly illogical arguments.

I apologize in advance if I make remarks that are condescending. I must admit that any condescension, however, is most likely in direct contrast and rebuttal to condescension I perceived in the podcast.

Upon multiple listens I have become slightly less frustrated with the level of argumentation, but not by much. I transcribed some sections of dialogue as best as I could (sorry for any errors, hopefully they are all minor and do not effect the content of the messages).

I want to start off by saying that there are in fact many elements of the discussion with which I sympathize and agree. The conclusions drawn, logical formulations used, and arrogant dismissal of opposing views, however, was beyond my ability to support.

Boudreaux near the beginning of the podcast manages to state off handedly, as if it is a ridiculous question, "of course I'm not against democracy." Indeed, what would give someone that idea? Maybe the fact that the entire second half of the podcast is dedicated to "painting a more realistic picture" of democracy, which also happens to sound a lot like painting democracy as negatively as possible and defending Don's choice not to participate in the representative democracy we have. This "realistic" portrayal seems to contain no support of the institutions of a republic, and considering he says he is philosophically a non-statist, that is not surprising. In that case the only element that doesn't fit is his "of course" endorsement of democracy, whose participants he later describes as being lead around by the nose and performing a task no more important than buying paper towels.

This is all the more perplexing considering that, in response to Robert's protestation that they are not anarchists, not against all government, Don actually disagrees (somehow without making it seem as if he disagreed and without followup from Russ) and says that he is "philosophically an anti-statist."

From an anarcho-capitalist perspective I have to question this from the outset. What does he mean of course? Do you not think the nature of a democratic state is completely removed from critique and discussion? Obviously not from the remainder if the podcast. He seems to state "of course" in absence of an argument. What does he use to defend this institution? Considering he is a non-stater why does he pay lip-service to things to which he says he is philosophically opposed? If you are going to defend your philosophy, defend it, don't pussy foot around. Unless by "philosophically" he means impractical or indefensible.

Either way he fails to elaborate on it. Does he believe ideally there WOULD be no government? After all that is what anti-statist means. He is careful to say he is not an anarchist, because that means without law and chaos. Well he seems to be misguided in his entomological assertion. Anarchy, from the Greek, means literally "without a ruler." "Archy" meaning ruler also in other words such as monarchy, oligarchy, etc. Now he is accurate in laymen's terms that anarchy can be used to refer to chaos, mob rule, lawlessness, etc. As a political philosophy it means none of these things and thus his distaste for the word seems wholly unjustified. I in fact find it hard to believe that he is not aware of this given the abundance of literature, making me wonder if his distancing from the word is in order to distance himself from certain philosophers within the tradition or the tradition itself. I could be wrong, but this seems like a somewhat disingenuous way to deal with the matter to me.

Whatever he wishes to call it, it is basically the same. Non-statist, anarchist, voluntarist, etc. There are subtle differences to some, but Don does not make any attempt to express these.

He fails to clarify his views on democracy at an early point in the podcast by stating that he is not a "genius" in the field and wishes not to speak too much about specifics of democratic process do to his lack of expertise. This is perfectly fine, if someone feels that don't understand a concept well they SHOULD recuse themselves from serious discussion. Don appears to be a quick learner because just a few minutes later he demonstrates none of the humility or reluctance to discuss this very subject, instead showing his willingness to outright denounce something in which he had only minutes before claimed no expertise.

Apparently for Boudreaux democracy is something delegated to the less informed, less articulate members of society. Those unable to write letters to the editor, make blog postings, and teach. Those who don't have these platforms have to be relegated to sitting on the sidelines and moronically being lead around by their noses. How else can one explain his positions? He says he is for democracy, but considers engaging in its practice to be beneath him and less important than everything else he does in his life, so much so that he finds it next to impossible to justify spending 1 1/2hrs once a year detracting from any other portion of his life to dedicate to this task. "Of course" he's for pointless democracy.

Boudreaux on the other hand performs important cultural duties by informing others, unable to find out for themselves the truth, so that THEY can go out and do the voting for him I suppose? Otherwise what is the point of his writing blogs and letters? Blogs and letter to encourage others sympathetic to his view to not vote? Somehow, according to Don, the only time voting will matter is when culture makes a dramatic turn (somehow not demonstrated in elections?) and the force of will demands a vote. As Don says "I think if that culture is built then it will be reflected in the political process, but I do not believe the political process can lead it, if people want to be lead by the nose or are content to be lead by the nose then gov't will lead them by the nose." So Don, how exactly does this culture building get reflected in voting? Am I the only one who sees the absurdity? I mean seriously. Don is hard at work building a culture that at some point will start voting, when exactly does it become helpful to vote? If voting does not change anything, than why EVER vote? Why have a democracy? Why are you too important to vote? If you are not too important to vote how do you explain supporting the process but not partaking?

When DOES it matter to vote? This is something you must answer if you do indeed support the constitutional republic on which this country is based. From where does your SUPPORT of democracy come?

Upon what basis does Boudreaux claim that the romantic vision he describes is pervasive? When Russ (probably my favorite part of the podcast) asks this, Don's speech seems to stumble and become gibberish for a few seconds until his composure returns. And for good reason. ~50% of eligible voters do not vote in any given election. This of course depends on many factors, sources, and method of calculation, but I believe it is a decent approximation.

I think it is mighty hard to argue that this 50% (many of whom are not registered) is largely composed of people who do not have this overly idealistic view of the democratic process. In very low turnout periods it can become as low as 30% of the VAT (Voting Age Turnout), meaning 70% of voting age individuals feeling no need to vote in at least some elections. If you have reason to believe that this is evidence of overly romantic views and not cynicism, I would like to hear it. On top of that plenty of people, including Russ Roberts, DO vote and yet have a less than romantic view of the democratic process to say the least. On top of THAT there are plenty of studies regarding peoples confidence, trust, and opinion of various aspects of government, most of them none too flattering.

Beyond that there is the immense amount of anecdotal evidence, in the form of jokes, comments, etc. regarding peoples distrust of government, representatives along the lines of general popular distrust of lawyers, used car salesmen and such. So again Don, where do you get this idea that people have an overly romantic view of government? How many jokes about how great government is do you know?

You can also find similar criticisms of the democratic process across the entire ideological spectrum, from Noam Chomsky to Pat Buchannan, Michael Moore to Don Boudreaux. These are not new or fringe ideas. I'd say your presentation of the hyper-idealized romantic view of democracy IS the minority, or even FRINGE, belief.

If you have ANY evidence, ANYTHING that would support your claim I would be VERY surprised but DELIGHTED to hear about it.

Until you gather that evidence I would seriously consider toning down your rhetoric about the populace being "oblivious" and "lead around by the nose" in electoral politics. Maybe YOU are the one who needs to become more aware of the reality.

One of the things I like about the show is that you frequently discuss not only interesting ideas but also the history of those ideas. Here it would have been nice to mention Anthony Downs during the discussion on voting, since the suggestion that "voting is irrational" is apparently not entirely original.

This quote comes from "Economics" by Samuelson and Nordhaus:

"Joseph Schumpeter pioneered public-choice theory in 'Capitalism, Socialism, and Democracy' (1942), and Kenneth Arrow's Nobel Prize-winning study on social choice brought mathematical rigor to this field. The landmark study by Anthony Downs, 'An Economic Theory of Democracy' (1957), sketched a powerful new theory which held that politicians set economic policies in order to be reelected. Downs showed how parties tend to move toward the center of the political spectrum, and he posed the 'voting paradox', which holds that it is irrational for people to vote given the small likelihood of any individual affecting the outcome."

Perhaps others who were upset by this podcast can go and read that article, a PDF is available through Google Scholar. :)

Boudreaux is content to inexplicably hold contradictory positions, all the while offering subtle, jibes, mockery, and chuckles at those silly enough to disagree.

"[The] scientific point remains… no voter is going to change the outcome of an election." So because his individual vote does not single handedly alter the course of government… that is a bad thing? I always thought THAT WAS THE POINT of democracy. No one person should be trusted with control over everything so we elect various people to various duties in order to prevent as much central control as possible.

Apparently Don thinks this is a downside, I (who happen to think no individual holds all, or even a significant fraction, of the knowledge and truth available in the world) believe that when knowledge is decentralized and imperfect this is most likely, if not the best, one of the best systems available to us as a society. Apparently Boudreaux is confident enough in his intelligence and providential knowledge of how to run a society that being relegated to having an equal, and therefore insignificant, vote is an affront to his obvious preeminence.

Although I too am skeptical of democracy, the state, majority rule, the ability of a society to come to communal consensus, etc. Considering I currently have not been persuaded as to a better more expedient system other than democracy for continued improvement of the conditions of its citizens, such as myself, I except the fact that my vote (which I only cast if I feel I have a decent grasp of the topic at hand) has but a fractional effect on the governmental process. Making it important to participate in various other ways. I realize that hopefully my vote will be tallied, and whether or not I am on the "winning" side, that the expression of my will along with the many others who voted, had some small effect (proportional to I being but one man). If not the initiative itself, the perception of the issue. For instance a vote of 50.5% to 49.5% has much different implications than say a vote of 67% to 33%. Again, in every election I have voted, my contribution has next to nil effect on the actual percentages. Then again does giving a dime to the march of dimes cure any disease or save any child? No, but it, when combined with other donations, does. Should I not donate because it won't "really" change anything? I think you would agree that is absurd, why is it any less absurd with voting? An institution you, once again, said "of course" you support it.

That is like saying "of course I support the March of Dimes Foundation. I constantly blog about it, write op-eds, and such. It is silly to actually donate, however, because my small contribution will not have any real effect. The extra time spent trying to earn that money could much more efficiently be used to encourage others." This argument could be correct, but still fallacious. For example Brad Pitt could argue that using his celebrity to promote a charity would raise more money than simply donating, but that is obviously beside the point since it is completely within his means to do both. Sure he could complain that the time he spends withdrawing the money, and bringing it down to the charity, etc. could be spent playing with his kids, after all you don't want him to be a bad father, right? If he spends ALL his time raising money for other kids he will be a bad father!

I suppose this is justified as more important because Brad Pitt is able to spend enough money to make a big difference. Once again, what about small donations? A family that is not well off sparing a few dollars? Would you argue, don't bother it wont matter?

Another relevant example deals with toxic materials. Many drains instruct you not to dump things such as paint, battery acid, etc. into drains because that material could wind up getting into the water supply. You could easily argue that dumping ONE bucket of oil into the drain won't hurt anyone. It also takes time to dispose of these chemicals responsibly, usually having to be taken to a special facility. So, why would you not dump it in the storm drain? It in and of itself will cause no harm. It is one can of oil out of many people most likely dump in the drain. Maybe writing a blog about how other people should not dump oil in the storm drain will have a bigger effect… or maybe not. Either way it takes too long to get rid of it properly and you could be playing with your kids and being a good father. Even if you only have to dump oil once a year and it takes at most an hour and a half, it still is in no way worth it. Do you want me to be a bad father?

These arguments are silly. Such arguments can be made for almost anything, the only difference is that I think you would realize the absurdity in these other situations.

I have decided that despite having more to say I will just end it here with one final statement.

Don Boudreaux, why do you support the democratic process if you believe it is pointless for you to participate? Or at the very least there is very little point in participating? Who SHOULD participate in the process? Why even support it? Why would you not be precisely the type of person to participate given your apparent knowledge of policy? For instance I can understand telling someone who does not even know what they are voting on not to vote, or someone who has next to no interest in policy, etc. But why you? Isn't this hypocritical?

I just recently found out about the podcast and have enjoyed it. I enjoyed the discussion with Don Boudreaux and agreed that statistically speaking my one vote does not make a difference. I believe I found a flaw in his logic though, when he stated his time would be better spent thinking about policy instead of spending his time voting. Given he does not vote there are only two ways his thinking about policy could impact our political situation. The first way would be for him to convince people who do vote that his position is correct and they would elect people who agree with that position. The problem is if he is able to convince people he is correct about this new policy, he should also be able to convince them it is correct that their one vote does not make a difference. So either he's not able to convince anyone, in which case what he thinks about the situation does not matter because he does not vote, or he's able to convince a significant number of people he is correct, but unfortunately none of these people vote so they are unable to make a difference either. In fact, the more successful he is in convincing people he is correct the more damage he will do his cause, because the only people left voting will be the people who do not agree with his position. The only way he would be able to make a positive contribution would be to convince a politician to adopt this new policy in such a way that the voting populace did not hear his arguments. That doesn't seem very likely.

Another point is that even though my one vote does not make a difference by itself, I don't vote in a vacuum. The fact I vote and encourage others to vote, allows me to multiply my impact. While no national elections have been decided by a single vote there have been multiple times a few hundred votes made a difference. If my voting encourages another person to vote and that persons act of voting encourages another person to vote and so on it is very possible that my act of voting could make a difference in the election. That would especially be true for a commentator such as Don.

It seems to me that the voting situation is part of a broad category of situations where the one single act does not make a difference but the sum of the acts does. If I pick a flower in a national park it really will make no difference to the environment but if 1 million visitors pick a flower it will damage the environment. If I pour the oil from my car to my gravel driveway it will really make no significant difference to the environment, but if 1 million car owners do the same the groundwater will become polluted. If I abandon my unit and don't join in the D-Day attack in 1944 it really wouldn't make a difference but if the entire division chose not to participate the attack would fail. It seems to me, as a society we have decided to function we need to teach people to act in the way we want society as a whole to act. The same principle seems to apply to me as an individual. If I skip a day in my exercise routine it really makes no long-term difference, but if I skip it every day for the next year I could gain 40 pounds.

I would like to make one last point concerning the analogy about how we pick politicians compared to how we buy groceries. It is true that we would never buy groceries the way we pick politicians, but we do buy houses that way. Unless you build your house from scratch (which most of us don't), there will be trade-offs in your purchase. One house will have a great basement but only one bathroom another house will have three bathrooms but a tiny basement, etc. We pick the house that best meets our standards and learn to live with the shortcomings. In the same way we pick the politician that best meets our standards and learn to live with the shortcomings until we can find someone better.

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